Small businesses must strive for government contracts, analysts say

The White House is seen early Saturday, May 4, 2013, in Washington. (AP Photo/Carolyn Kaster) (Associated Press)

Clark Fields tells clients that registering to do business with the federal government is like getting a driver’s license.

“You are eligible to drive a car,” said Fields, a government procurement counselor with the Small Business and Technology Development Center’s North Carolina Procurement Technical Assistance Center. “But that’s not necessarily going to take you anywhere.”

Fields and others with experience in government contracts and related work said the public marketplace can help diversify a small business’ customer base and smooth out cash flow, as public and private spending often are often countercyclical.

Paths to the public marketplace include subcontracting or teaming with a prime contractor, micro-purchases and building experience and certifications in programs intended to help disadvantaged owners.

The U.S. government is the single largest purchaser of goods and services in the world, awarding about $500 billion in contracts each year, according the U.S. Small Business Administration. The SBA works with federal agencies to award at least 23 percent of government contracts to small businesses, and meet specific statutory goals for small, disadvantaged businesses, women-owned small businesses and other businesses that face hardships.

But small-business owners are sometimes discouraged or hindered by the process’ complexities and regulations, and they have a lack of understanding of the importance of using networking and other resources.

“They think, ‘If the government needs me, they will find me,’ ” Fields said. “And that is simply not true.” Planning, marketing and networking are important parts of the process, along with registering and receiving appropriate small-business certifications.

Sepideh Asefnia, president and founder of Raleigh, N.C.-based SEPI Engineering & Contracting, worked as a highway engineer for the N.C. Department of Transportation, and she held other related private and public positions for 16 years before starting her own firm in 2001.

SEPI turned its attention to the private and federal markets in 2006, when transportation projects in the Carolinas, which accounted for about 80 percent of the firm’s revenue, dropped significantly.

Asefnia’s strategy included seeking networking opportunities with large businesses and informing them of the services that SEPI offered.

Asefnia visited military bases and reached out to civil firms that had multiyear federal contracts. She also utilized the N.C. Military Business Center, which seeks to help companies in the state participate in military and federal contracts.

In 2006, SEPI won an opportunity to team with a prime contractor and participate in a traffic signal design at Seymour Johnson Air Force Base in Goldsboro, N.C. In 2009, SEPI became a prime contractor on a civil and environmental engineering contract with the U.S. Army Corps of Engineers in the Wilmington District. The company has been awarded prime federal contracts worth nearly $9.4 million, according to the Federal Procurement Data System.

Now, about 20 percent of SEPI’s revenue comes from federal work, about 30 percent from private and 50 percent from state and local, Asefnia said.

“I wanted to grow the business, and I pushed as hard as I could,” Asefnia said. “People have to be so focused, and so tenacious and so resilient, and every time you fall, you have to get back up and say, ‘I am going to make this work.’ ”

Fields said procurement counseling typically starts by educating business owners on the process of becoming a contractor and assessing their suitability for contracting.

“They may say, ‘I am interested in plumbing construction’ or ‘management consultants,’ ” Fields said. “So I will provide them with a list of those contracts, and also show them how to generate that list themselves.”

The information will help small-business owners understand whether and where they might be able to compete and walks them through the state or federal registration process.

Fields also helps owners develop a marketing plan.

Small-business owners need to identify and target agencies or prime contractors that they are interested in working with and set up a meeting with them. Small-business specialists, often part of the federal agency’s contracting team, are a great first point of contact, Fields said.